Received: 17 January 2016 | Revised: 10 December 2016 | Accepted: 19 December 2016

DOI 10.1111/beer.12146

ORIGINAL ARTICLE

CSR and the workplace attitudes of irregular employees: The

case of subcontracted workers in Korea

Mohammad A. Ali1 | Heung-Jun Jung2

1
School of Business Administration, Penn
State (Harrisburg), Middletown,
Abstract
Pennsylvania, USA In recent years, there has been a noticeable increase in organizational trends to hire irregular work-
2
Korea Labor Institute, Sejong National ers. This inclination, in a time of great flux and uncertainty, exacerbates human resource issues
Research Complex, Sejong-si, Korea faced by firms. We argue that corporate social responsibility (CSR) can be an important antecedent
Correspondence to improve the workplace attitudes of irregular workers and as a result reduce the negative impact
Mohammad A. Ali, School of Business
on organizations of the increased use of an irregular workforce. Hence, we explore the relationship
Administration, Penn State (Harrisburg),
Middletown, PA 17057, USA. between perceived CSR (composite and disaggregated) and unfairness perception and social rela-
Email: maa31@psu.edu tions of subcontracted workers with regular workers. We further attempt to explain these
or relationships through the mediating effects of psychological contract violation and organizational
maali1969@gmail.com
identity, respectively. Our analysis supports a negative effect of composite and external CSR on
unfairness perception and positive effect on social relations. Additionally, our results support par-
tial mediating roles of psychological contract violation and organizational identity. Theoretical and
practical implications of the results are also discussed.

1 | INTRODUCTION
In the last two decades, business strategies have been dominated by
two important concerns, that is, gaining social legitimacy through cor-
porate social responsibility (CSR) (Story & Neves, 2015), and achieving
workforce flexibility through the use of irregular workers (Yang, 2012).
With regards to employee workplace attitudes, the impact of these
two strategic options could be opposite to each other.
Carroll (1979) gives a broad definition of CSR by highlighting four
pivotal organizational responsibilities: economic, legal, ethical, and phi-
lanthropic. These organizational responsibilities are not mutually exclu-
sive, can exist simultaneously (Carroll, 1979), and organizations may
put varying emphasis on them based on particular organizational goals
and strategies (Schwartz & Carroll, 2003). In essence, this definition
stresses that a socially responsible business while dealing with its inter-
nal and external stakeholders1 ought to go beyond traditional profit
maximization motives (Jamali & Neville, 2011) and attempt to attain
congruence between societal expectations and business needs.
Regarding the impact on employees, scholars have found that organiza-
tional CSR has a positive relationship with crucial employee workplace
behaviors (Brammer, Millington, & Rayton, 2007; Farooq, Payaud, Mer-
unka, & Valette-Florence, 2014; Hansen, Dunford, Boss, Boss, &
Angermeier, 2011; Hofman & Newman, 2014; Rupp, Ganapathi, Agui-
lera, & Williams, 2006).
On the other hand, in the past few decades, employment arrange-
ments have moved from just-in-time manufacturing to just-in-time
employment where employment agencies play the role of “ATMs of the
job market”2 (Feldman, Doerpinghaus, & Turnley, 1994). This increasing
use of irregular employees may produce positive and negative results in
organizations. It may allow organizations to gain workforce flexibility and
cheaper access to a larger pool of skills (Boswell, Watkins, Triana, &
Zardkoohi, 2012; Kuvaas, Buch, & Dysvik, 2013). Conversely, it may have
an adverse impact on workplace attitudes of both the regular and irregu-
lar workers (Davis-Blake, Broschak, & George, 2003; Lautch, 2003).
This study attempts to make the following significant contributions
to the extant literature on CSR and its impact on employees. First, in
view of the above discussed conundrum, the singular contribution of
this work is that it makes the first scholarly attempt hitherto to investi-
gate the impact of CSR on the workplace attitudes of irregular workers.
We argue that with the increasing incidence of irregular work arrange-
ments, the overall organizational performance now also depends on
the productivity and positive workplace attitudes of irregular workers
(Drucker & Stanworth, 2004). Therefore, we initiate a critical discussion
and predict that the subcontracted workers’3 perceptions of their client
firms’ CSR (composite) and external and internal CSR (disaggregated)
may minimize the adverse effects of externalization on them by nega-
tively impacting their unfairness perceptions and positively impacting
their social relations with regular employees.

Business Ethics: A Eur Rev 2017; 1–17 wileyonlinelibrary.com/journal/beer V

C 2017 John Wiley & Sons Ltd | 1
2 |
Second, we attempt to improve our understanding of the sug-
gested relationships in two ways. One, we propose the mediating roles
of psychological contract in the relationship between CSR perceptions
(composite and disaggregated) and unfairness perception; and organi-
zational identification in the relationship between CSR perceptions
(composite and disaggregated) and social relations. Two, we test the
impact of CSR in its composite and disaggregated forms. We consider
CSR as a multidimensional concept related to different organizational
stakeholders. Internal CSR activities concentrate on internal operations
of the firm and focus on stakeholders within the company (Brammer
et al., 2007). External CSR, conversely, relates to the way an organiza-
tion interacts with its physical environment (Carroll, 1979). We argue
that a positive relationship between internal CSR and positive
employee attitudes may be seen as intuitive. However, the impact of
external CSR—which also represents the social dimension of CSR—on
internal stakeholders has not been studied extensively (Brammer et al.,
2007; Peterson, 2004). Therefore, our study not only investigates the
impact of composite and internal CSR on employee attitudes, but it
also examines the return to organizational socially responsible actions
in terms of employee workplace behavior.
Third, theoretically, most studies have either utilized social identity
theory (SIT) (Brammer et al., 2007; De Roeck, Marique, Stinglhamber, &
Swaen, 2014; Turker, 2009) or social exchange theory (SET) (Farooq
et al., 2014) as mediating mechanisms to explain the impact of CSR on
employee attitudes. We argue that CSR is a complex phenomenon and
its relationship with employee attitudes needs to be explained through
several independent psychological mechanisms. Therefore, we utilize
the existing psychological mechanisms, that is, SIT and SET; however,
we suggest a unique mechanism, that is, heuristic fairness, to explain
the impact of CSR on unfairness perception and social relations of irreg-
ular workers. There can be three, that is, relational, instrumental, and
ethics-based, psychological mechanisms underlying the impact of CSR
on employee attitudes (Rupp, Patrick, Aryee, & Luo, 2015). SIT and SET
invoke the relational and instrumental aspects of these mechanisms by
focusing on identity and trust, respectively (Farooq et al., 2014; Rupp
et al., 2015). We argue that the fairness heuristic theory embodies the
underlying ethical imperative of fair treatment and represents the
ethics-based psychological mechanism. We further claim that fairness
heuristic theory would be a more appropriate psychological mechanism
to assess the impact of external CSR on internal stakeholders. Finally,
fairness heuristic theory adds to both SIT and SET mechanisms by sug-
gesting that indications of fairness toward all stakeholders may precede
the development of a relationship based on identity and trust.
Fourth, our focus on subcontracted workers underscores our intent
to prove our hypotheses in a complex three-way work arrangement
(Drucker & Stanworth, 2004) representing the most extreme form of
irregular employee externalization (Johnson & Ashforth, 2008). Finally,
we test our model in the collectivistic culture of South Korea.4 Although
we do not intend to introduce a cultural dimension in this research,
examining the impact of CSR on subcontracted workers in the South
Korean context may establish initial boundaries for the success of our
proposed model and help us interpret and explain our results.
ALI AND JUNG
The paper begins with a discussion of the context of the study,
that is, CSR trends in Korean society, corporate culture, and the studied
organizations, and the subcontracting practices adopted by the studied
firms. We then begin our hypotheses section by discussing the impact
of the extreme alienation on the workplace attitudes of the subcon-
tracted workers, and the proposed role of CSR perceptions of the sub-
contracted workers on their workplace attitudes. This section is
followed by methodology, results, and discussion.
2 | CONTEXT OF THE STUDY
2.1 | Institutional pressures for CSR in Korea
In the past few years, CSR has become an important part of the Korean
corporate agenda. This trend is evident from the fact that the top 220
Korean companies have increased their combined CSR expenditure
from $1.9 billion in 2008 to $2.4 billion in 2013 (Federation of Korean
Industries, 2014). This growing attention is attributable to a complex
interaction between several factors, which include the influence of the
Confucian tradition in Korea, state institutional pressures, and business
imperatives (Kim, Amaeshi, Harris, & Suh, 2013).
Korean culture is entrenched in Confucianism (Bae & Rowley,
2001), which promotes: notions of personal and organizational vir-
tues,5 social stability based on a hierarchical social structure, family
as the basic social unit serving as the prototype for all other societal
institutions, and work ethics that encourage hard work and constant
improvement (Hofstede & Bond, 1988; Kim & Choi, 2012). Under the
influence of Confucian values, South Korea has been categorized as a
collectivistic society with a long-term orientation and high uncertainty
avoidance (Bae & Rowley, 2001; Hofstede & Hofstede, 2005). This
collectivistic culture is further accentuated by existing social hierar-
chies, power distance, in-group loyalty, and preference for harmoni-
ous societal relations (Hofstede & Bond, 1988; Kim & Choi, 2012).
The Confucian cultural values are the main drivers of CSR in Korea
(Hofstede & Bond, 1988). At the business organization level, family loy-
alty has been transformed into organizational loyalty and family collecti-
vism has been transferred into organizational collectivism (Kim & Park,
2003). Hence, Korean CSR is largely manifested at the corporate level.
For example, unlike individualistic societies, for example, USA, Korean
businesses do not leave employee volunteering to individual motivations.
However, they encourage, manage, and report employee volunteering at
the corporate level (Kim et al., 2013). Korean firms maintain organiza-
tional stability by following the Confucian principle of social obligation,
which makes it imperative for individuals at higher levels of the social
hierarchy to care for the individuals at lower levels. Therefore, Korean
organizations care for their employees, regardless of firm strategy (Kim
et al., 2013). Finally, Korean organizations maintain harmony with the
society by taking a keen interest in reporting their socially responsible
actions to the society and engaging in the social discourse on CSR
through reports, seminars, and discussion forums (Kim et al., 2013).
Korean employees under the influence of Confucian values: accept
the paternalistic leadership of the employer (Bae & Rowley 2001);
transfer family loyalty to the collective, that is, the company; and
ALI AND JUNG
exhibit a work ethic that requires constant improvement of perform-
ance (Kim et al., 2013). Additionally, the Confucian principle of social
obligation leads to the development in Korean workers of certain
expectations of responsible behavior from their firms. Hence, they are
more likely to expect and critically evaluate organizational socially
responsible behavior as compared to employees in individualistic soci-
eties (Kim et al., 2013).
The Korean government considers social responsibility expenditure
as a quasi-tax, and a job creation mechanism, and, therefore, puts pres-
sure on Korean firms to be socially responsible (Kim et al., 2013). Over
the years, government’s emphasis on CSR has progressively increased
from limiting double accounting practices and illegal political contribu-
tions in the 1990s to greater stress on increasing corporate expendi-
tures on social concerns and providing standardized CSR activity
reports (Kim et al., 2013). Overall, the government encourages a corpo-
rate culture imbued in the Confucian collectivistic tradition of hierarchi-
cal social relations in which the welfare of individuals at the lower
social strata of society is the responsibility of individuals at the higher
levels (Kim et al., 2013).
Finally, since the early 2000s, social responsibility has become a
vital part of the global discourse on the role of business in society
(Waddock, 2008). A new global governance structure for global CSR
has emerged represented by organizations like the UN Global Com-
pact, the Global Reporting Initiative, and the International Organization
for Standardization 26000 (Dunning, 2003). The Korean economic
model relies heavily on international business. Therefore, to success-
fully operate in the global market, Korean corporations have to comply
with several international standards emanating from different interna-
tional sources (Kim et al., 2013). Additionally, the corporate movement
toward greater social responsibility is also supported by strategic bene-
fits as a positive and significant relationship has been found, in Korea,
between corporate financial performance and stakeholder-weighted
CSR (Choi, Kwak, & Choe, 2010) and internal CSR and competitive
advantage (Lee & Jung, 2016).
Given the preceding discussion, it is argued that the perceived sen-
sitivity to certain moral principles in society are closely related to the
conceptualization of CSR in that society (Kim & Choi, 2012; Vitell, Pao-
lillo, & Thomas, 2003). Additionally, cultural imperatives and institu-
tional environment of a society not only guide organizational socially
responsible actions (Abreu, Cunha, & Barlow, 2015), but they also
guide the development of certain expectations of individuals from soci-
etal institutions including businesses (Whitcomb, Erdener, & Li, 1998).
Therefore, the cultural and institutional context in Korea may outline
the initial boundary conditions for the impact of organizational CSR on
employees’ attitudes by not only setting the parameters of how Korean
firms define their social responsibility but also by outlining societal
expectations from businesses.
2.2 | Internal and external social responsibility in the
studied broadcasting companies
The democratization in 1987 and the advent of commercial broadcast-
ing has established a competitive broadcasting structure in Korea. This
| 3
structure is dominated6 by two government—KBS (Korean Broadcast-
ing System) and MBC (Munhwa Broadcasting Corporation)—and one
public broadcasting company—SBS (Seoul Broadcasting System)
(Kazuma, 2005; Sungeun, 2008).7
We conduct our study on the mentioned broadcasting companies
because these companies have, over the years, exhibited significant
CSR-related activities. They are also very amenable to social contribu-
tions (Han, Lee, & Khang, 2008) as their continued financial survival
and administrative independence, especially for the two government
owned companies,8 rests heavily on their positive public image. Finally,
the selected companies collectively represent the majority share of the
broadcasting industry in Korea, thus providing our study a comprehen-
sive foundation for testing our hypotheses in a major Korean industry.
For higher ratings, the channel’s overall image and reputation are
equally important along with content quality. All researched companies
conduct CSR performance audits and engage in socially responsible
activities directly or through foundations established for this purpose
(Woo, 2013). KBS, for example, in its annual report emphasizes its
stakeholder orientation by reporting on organizational philanthropy,
volunteering, and other social service and donation campaigns (KBS,
2013). The Report enumerates several socially responsible activities
like the creation of volunteering clubs for employees to help the under-
privileged by donating their time, labor, and talent. These volunteering
clubs visit welfare centers to give free performances and do other char-
itable work to raise funds for social causes. KBS also promotes charity
shows to raise money for local and international natural disasters, for
example, KBS organized a fundraiser to help typhoon victims in the
Philippines. KBS airs programs through its social channels to bring posi-
tive social change by challenging societal prejudices toward the dis-
abled and minorities. Finally, KBS has sponsored a Happy Wedding
program to arrange wedding ceremonies for couples who could not
afford to get married. In essence, KBS’ social activities illustrate that
the company sees itself part of its community and considers its com-
munity role just as important as its financial obligations. Similarly, SBS
also engages in CSR through donations, sustainability campaigns, and
volunteer work (SBS, 2014). In sum, the studied broadcasting channels
engage in internal and external CSR, and it has been found that there is
a significant relationship between the CSR activities of these channels
and the channel quality perception in the Korean audiences (Woo,
2013).
In the last two decades, cost saving has led most Korean firms to
engage in strategic outsourcing (Ha & Lee, 2013). More specifically, the
share of the subcontracted workers in the overall contingent workforce
has increased from 4.1% in 2000 to 7.1% in 2014 (Jung, Kim, & Yoon,
2015). Broadcasting companies also followed suit by replacing perma-
nent news team drivers with temporary ones. However, in 2004, KBS
changed its policy from hiring temporary workers to hiring subcon-
tracted workers from its subsidiary temporary employee agency. SBS
and MBC also changed their policies from outsourcing to hiring sub-
contracted drivers.9 These subcontracted employees operate under the
dual control of the agency and client firms. Administratively, the
employers, that is, agencies, are in charge of the formal human
4 |
resources management. However, substantial working conditions (e.g.,
the total amount of labor cost, directions, and workplace conditions)
are determined by the client firms. Financially, the primary employer is
responsible for paying the subcontracted workers. However, the levels
of pay and pay increases heavily depend upon the client firm’s policies.
The Korean broadcasters have attempted to balance workforce
flexibility with socially responsible behavior toward their subcontracted
employees by establishing certain inclusive policies. The subcontracted
workers have a substantive relationship with the broadcasting compa-
nies where they have the right to use such amenities as training rooms,
nursing facilities, and broadcasting staff lounges. In the field, the sub-
contracted workers also have a visible connection with their client firm
as they wear T-shirts and hats that support the logo of their client
broadcasting company.10 Additionally, the employment duration of
these employees is relatively longer than the typical temporary agency
11
workers or independent contractors. They also have repetitive con-
tracts with their primary employer and enjoy a higher level of employ-
ment security than other types of nonstandard workers. In the case of
KBS, a KBS subsidiary provides lifetime employment through collective
agreements with the parent company’s acquiescence. Finally, the
broadcasting firms, though not legally required, have maintained formal
or informal negotiations with union leaders representing the subcon-
tracted workers since 2004.
3 | HYPOTHESES DEVELOPMENT
3.1 | CSR and the subcontracted workers:
Initiating the debate
Since the 1990s, in response to competitive national and global mar-
kets, business firms have increased the use of contingent workers to
enhance workforce flexibility, reduce costs (Boswell et al., 2012; Yang,
2012), and gain access to specialized skills and knowledge (Kuvaas
et al., 2013). We argue that irregular workers may contribute to similar
strategic and performance objectives as regular workers (Lautch, 2003).
We further argue that to encourage positive workplace behaviors of
the contingent workers, there is a need to mitigate the adverse effects
of externalization inherent in temporary work arrangements. Hence,
we initiate a necessary, albeit an ignored, scholarly debate by suggest-
ing that the CSR profile of the firm may be one tool that can be utilized
to alleviate the negative impact of externalization on irregular workers.
Finally, we prove our hypotheses by focusing on an employee group
that faces the acutest form of externalization, that is, subcontracted
workers (Johnson & Ashforth, 2008).
The subcontracted workers operate in a uniquely different work
arrangement from the normal dyadic employee–employer relationship
(Boswell et al., 2012) where there are “three parties—and six sets of
mutual expectations” (Drucker & Stanworth, 2004, p. 59). This triangu-
lar arrangement institutes a complicated employee–employer relation-
ship where the work is contracted with specific targets and durations
and is to be performed off the employer’s campus under the supervi-
sion of the client organization (Drucker & Stanworth, 2004; Lapalme,
Stamper, Simard, & Tremblay, 2009). Hence, other than the general
ALI AND JUNG
sense of replaceability felt by all irregular workers (Lautch, 2003), the
subcontracted workers may experience a more profound sense of
expandability due to the externalization of place, administrative control,
and diminished duration of employment (Pfeffer & Baron, 1988).
The unique structure of the subcontracted work and the ensuing
extreme sense of externalization may create two complex issues. One,
when the subcontracted workers compare their particularistic resour-
ces, that is, status, support, and reputation,12 with those of regular
workers, they might develop an enhanced perception of unfairness,
which might lead to reduced effort on their part (Janssen, 2001). Sec-
ond, the sense of externalization would weaken the attachment of sub-
contracted workers to the client organization (Rousseau, 1998) and
may lead to difficulties regarding the integration of these workers with
regular employees in the client organization. We argue that a positive
perception of the client organizations’ CSR (composite and disaggre-
gated) would negatively impact the subcontracted workers’ unfairness
perception and positively impact social relations between subcon-
tracted workers and regular workers.
3.2 | Impact of CSR on unfairness perception:
Fairness heuristic and social exchange mechanisms
Employees evaluate the fairness of an exchange relationship with
their respective organizations “by first examining the ratio of their
inputs (e.g., effort, time, and cognitive resources) relevant to their out-
comes (e.g., pay, promotions, and opportunities for professional develop-
ment)” (Cropanzano, Byrne, Bobocel, & Rupp, 2001, p. 167). Perceived
inequity and discrepancies in effort and reward lead to changes in
employee behavior, where employees readjust the perceived inequity
through diminished effort, performance (Janssen, 2001), and counterpro-
ductive workplace behaviors (Robbins, Ford, & Tetrick, 2012).
We argue that the subcontracted workers’ feelings of unfairness
may be alleviated by their perception of the client organization’s CSR
(composite and disaggregated). To explicate the psychological under-
pinnings of the impact of a multidimensional concept like CSR on the
workplace attitudes of the subcontracted workers, we have applied
two different theories, that is, fairness heuristic and SET.
Cropanzano et al. (2001) argue that the fairness heuristic theory
provides an explanation of how fairness judgments are formed in social
interactions. In social interactions between individuals and social enti-
ties, the person’s capacity to control the results of the interaction is
less than the entity due to the difference in overall power, resources,
and knowledge. The theory postulates that a meaningful exchange can
be made easier if individuals can develop some degree of confidence in
their perception of the expected fairness of an interacting social entity.
This process of fairness judgment formation relies on the evaluation of
the readily available information on the social entity (Cropanzano et al.,
2001) and its perceptible proclivities as evidenced by its actions and
proclaimed policies (Godfrey, 2005). Once the evaluations of organiza-
tional tendencies are made, individuals may consider their appraisals as
implicit promises with moral implications (Vlachos, Theotokis, & Pana-
gopoulos, 2010), where the fulfillment of these promises may lead to
approbation rather than censure of the entity in question.
ALI AND JUNG
Regarding employee–employer relations, the requisite employee
confidence in their organization’s penchant for fairness may develop if
they perceive that they will be treated fairly by their firms. To develop
this perception, the employees may rely on internal and external sour-
ces of information that may include media, personal interaction, and
basic information encompassing areas of organizational strategy, policy,
and consistency of processes (Cropanzano et al., 2001). If this informa-
tion is positive, then it may lead to a favorable stance toward the orga-
nization. Furthermore, once a positive impression is created, employees
may persist and get fixated on their initial assessment of the fairness of
the organization in question (Cropanzano et al., 2001; Rupp et al.,
2006).
The SET posits that in human relationships, core norms of reciprocity
set the conditions for human behavior (Blau, 1964; Gouldner, 1960). CSR,
especially internal CSR, requires organizations to consider their employees
as relevant stakeholders with intrinsic value leading to employee-centered
policies in which employees are supported and treated fairly (Fassin,
2012). Based on SET, the quality of employee treatment might determine
the quality of the relationship between the firm and its employees (Bhat-
tacharya, Korschun, & Sen, 2009). Therefore, employees’ perceptions of
positive organizational treatment may set a pattern in which employees
may increase their investment in the company by demonstrating positive
workplace attitudes, high organizational commitment, and high job satis-
faction (Janssen, 2001; Story & Neves, 2015).
Given the preceding discussion, we argue that the subcon-
tracted workers’ perception of the client firm’s CSR (composite and
external) can be a heuristic shortcut, which may mitigate subcon-
tracted workers’ inherent unfairness perception. Socially responsible
organizations have stakeholder orientations with the aim to treat
their internal and external stakeholders fairly. For this purpose,
these organizations have often developed unambiguous socially
responsible policies, strategies, and fair and consistent organiza-
tional processes. Thus, a comprehensive CSR profile of the client
organization could indicate to the subcontracted workers that it has
an established propensity to treat its stakeholders fairly. This view
once instituted may lead to positive workplace attitudes and behav-
iors (Rupp et al., 2006) and might also persist as such established
views can have paradoxical effects on employees even when the
organization is violating its psychological contract (Heckscher,
1995). Furthermore, positive interactions—based on internally
responsible policies of the client firm—between the subcontracted
workers and their client firms may also alleviate their unfairness per-
ceptions toward their client organizations.
Based on these ideas, the following hypotheses are presented:
Hypothesis 1: The subcontracted workers’ perception of the over-
all CSR of the client firm is negatively related to their unfairness
perception.
Hypothesis 1A: The subcontracted workers’ perception of the
external CSR of the client firm is negatively related to their unfair-
ness perception.
| 5
Hypothesis 1B: The subcontracted workers’ perception of the
internal CSR of the client firm is negatively related to their unfair-
ness perception.
3.3 | The mediating effect of psychological contract
Rousseau (1995) has defined psychological contract as “individual
beliefs, shaped by the organization, regarding terms of an exchange
agreement between individuals and their organizations” (p. 9). We
argue that psychological contract is idiosyncratic in nature and indi-
cates a promise perceived by the employee about the future intent of
the organization, which may not be shared by the organization (DiMat-
teo, Bird, & Colquitt, 2012). These expectations can emerge from com-
pany policies, verbal promises, casual statements, and social signals,
and need not be explicitly stated (DiMatteo et al., 2012). Finally, these
expectations can antedate the employee–employer relationship (Levin-
son, Price, Munden, Mandl, & Solley, 1962), and may change as the
employee–employer relationship develops over time (Anderson &
Schalk, 1998; Rousseau, 1995).
With some exceptions, the majority of the research on the psycho-
logical contract has focused on traditional workers (Lapalme et al.,
2009). However, scholars have argued that psychological contract is
relevant even for temporary workers (Stone, 2001). Scholars have
found that workplace attitudes between temporary and regular work-
ers may vary from each other based on their psychological contracts
(Conway & Briner, 2002). Temporary workers are more likely to have
psychological contracts with fewer employer obligations (De Cuyper
et al., 2008). Agency workers are liable to have two psychological con-
tracts with spillover effects (Lapalme et al., 2009). Hence, a breach of
the psychological contract of one organization might lead to the limita-
tion of commitment to both organizations (Conway & Briner, 2002).
It has been argued that organizational reputation as perceived by
the employee may constitute an important component of the psycho-
logical contract between employees and their organizations (McLean
Parks, Kidder, & Gallagher, 1998). Therefore, perceived positive atti-
tude of the firm toward its stakeholders, exhibited through organiza-
tional CSR (composite and external) may not only be used as a
cognitive shortcut to assess the client organization’s fairness by the
subcontracted workers, but may also create a positive psychological
contract for the subcontracted workers based on implicit expectations
of fair treatment. In other words, subcontracted employees, based on
the socially responsible orientation of the client organization, might
develop a psychological contract with certain expectations regarding
the future behavior of the firm that might even antedate the actual
interaction.
Furthermore, it has been opined that the psychological contract
between employees and employers may evolve or get altered over
time as both parties continue to interact with each other (Anderson &
Schalk, 1998; Rousseau, 1995). Hence, we argue that client organiza-
tion’s internal CSR policies and a positive exchange between the client
organizations and their subcontracted workers may improve, in the
subcontracted workers, existing perceptions of a psychological breach
6 |
or help develop positive perceptions of psychological contract regard-
ing future interactions.
Finally, when the psychological contract emanates from the sub-
contracted workers’ positive CSR perceptions of their organizations,
then a positive psychological contract would invariably have an adverse
impact on employees’ unfairness perception vis-
a-vis the client organi-
zation. In other words, perceived injustice will be a result of moral
transgression (Folger, 1998) arising from the feeling that the organiza-
tion has violated a moral code, that is, its expected socially responsible
treatment.
Based on these ideas, the following hypotheses are presented:
Hypothesis 2: The relationship between overall CSR perception
and unfairness perception of the subcontracted workers will be
mediated by their psychological contract.
Hypothesis 2A: The relationship between external CSR percep-
tion and unfairness perception of the subcontracted workers will
be mediated by their psychological contract.
Hypothesis 2B: The relationship between internal CSR perception
and unfairness perception of the subcontracted workers will be
mediated by their psychological contract.
3.4 | CSR and social relations with regular workers:
Social identity mechanisms
By definition, subcontracted workers, based on the length of their con-
tract, may work for many client organizations during one year. How-
ever, in this work, we have studied subcontracted workers who enjoy a
much longer tenure and, as discussed earlier, a substantive relationship
with their client organizations.
The subcontracted workers are usually employed to fill the gaps
left by regular workers in noncore functions (Lautch, 2003). This out-
sider status and the feeling of expendability may diminish the need and
desire of the subcontracted workers to fit in the organization and to
maintain positive relations with regular workers, hence creating ineffi-
ciencies by negatively affecting social relations between employees of
varying work statuses (Baron & Pfeffer, 1994). We argue that subcon-
tracted workers’ perception of the client firm’s CSR (composite and dis-
aggregated) may improve the social relations between them and
regular workers. We further argue that SIT may provide us with the
psychological explanations of the relationship between CSR (composite
and disaggregated) and social relations between regular and subcon-
tracted employees.
Social identification is perceived belongingness to a social entity
(Ashforth & Mael, 1989). SIT propounds that people tend to classify
themselves and others into social categories. This categorization, based
on certain characteristics of the self-concept,13 leads to the creation of
in and out groups, that is, people similar and different to oneself (Tajfel
& Turner, 1986). Individuals may have different “categorization
schemes” (p. 20) to classify themselves by identifying with sets of
groups or entities to varying degrees. Furthermore, social or group
identification is a “perceptual cognitive construct” (p. 21) in which indi-
ALI AND JUNG
viduals may develop a mental link with the acts and fate of a group
without even doing anything tangible to achieve the goals of that
group. Finally, social identity other than serving the principal purpose
of self-definition also fulfills a vital human need of maintaining a posi-
tive self-concept (Dutton, Dukerich, & Harquail, 1994; Tajfel & Turner,
1986) by associating with groups and entities that exhibit desired
attributes and enjoy positive external images (Brammer et al., 2007;
Buonocore, 2010; Dutton et al., 1994).
Business organizations are human aggregates with distinctive fea-
tures that may be desirable for individual employees. Hence, we argue
that the overall schema of a person’s social identity may include a psy-
chological attachment with several social entities, but their self-
concept is also influenced and shaped by the social entity in which
they work (Alderfer & Smith, 1982). We further argue that a positive
self-image is crucial for the subcontracted workers as contrary to regu-
lar workers, they might feel a greater need to piece together their
attenuated identities (Padavic, 2005).
George and Chattopadhyay (2005) discuss two broad causes of
identification of subcontracted workers with their client firms:
impersonal—organizational prestige, distinctiveness, and values; and
personal—quality of the relationship between the subcontracted
workers and their client organizations. Hence, if a client organization
has attained a positive image of a socially responsible firm, the sub-
contracted workers may develop a social identity with that firm to
improve their self-image by basking in the reflected nobility of the
positive organizational image.14 Furthermore, congruence between
the organizational values with subcontracted workers’ self-concept
(Ashforth & Mael, 1989) may also lead to social identity as individu-
als desire to maintain stable social identities, and an overlap of per-
sonal and organizational values allows them to sustain a unified self-
concept across situations (George & Chattopadhyay, 2005). Finally,
this intuitive sense of belongingness in the subcontracted workers
may be further supported and enhanced if the client firm can instill a
positive relationship with its subcontracted workers by treating
them as valued internal stakeholders.
As a consequence, this broad social identification with a firm may
lead to “outcomes conventionally associated with group formation,
including intragroup cohesion, cooperation, and altruism, and positive
evaluations of the group” (Ashforth & Mael, 1989, p. 26). In other
words, subcontracted workers’ CSR perception of their client organiza-
tions may result in the creation of a tangible psychological link with the
client firm leading to the desire to fit in the organization by becoming a
well-adjusted part of the group. Additionally, a longer, stable, and more
defined relationship between the subcontracted workers and the client
firm may positively contribute to the development of social identity of
the subcontracted workers and may also placate misgivings of regular
workers related to their work continuity and promotions making them
more amenable toward their subcontracted colleagues.
Based on these ideas, the following hypotheses are presented:
Hypothesis 3: The subcontracted workers’ perception of the over-
all organizational CSR is positively related to social relations of
subcontracted workers with regular workers.
ALI AND JUNG
Hypothesis 3A: The subcontracted workers’ perception of the
external organizational CSR is positively related to social relations
of subcontracted workers with regular workers.
Hypothesis 3B: The subcontracted workers’ perception of the
internal organizational CSR is positively related to social relations
of subcontracted workers with regular workers.
3.5 | The mediating effect of organizational identity
Social identity, as a cognitive link, satisfies the individual’s need for
self-definition and enhancement of self-concept. This perceptual link is
further strengthened and deepened when the intensity of the imperso-
nal and personal basis of identification increase (Boswell et al., 2012;
George & Chattopadhyay, 2005). This deeper form of social identity
causes “internalization of, and adherence to, group values and norms
and homogeneity in attitudes and behavior” (Ashforth & Mael, 1989, p.
26). Internalization thus represents a comprehensive form of social cat-
egorization in which individuals tend to copy and assimilate perceived
common characteristics of the social entity (Turner, 1985), and it may
further cause the development of organizational identity in which per-
sonal and organizational goals and beliefs become increasingly congru-
ent (Hall, Schneider, & Nygren, 1970). Organizational identification, in
essence, is a form of psychological attachment that comes into exis-
tence when employees adopt the defining features of the organization
as the defining characteristics for themselves (Dutton et al., 1994).
Scholars have argued that irregular workers compared to regular
workers have limited access to both particularistic (status, reputation,
and personal support), and universalistic (money or goods) resources.
Therefore, contract employees with short-term relationships with the
firm may experience diminished organizational identity (Johnson &
Ashforth, 2008; Rousseau, 1998). Furthermore, it has been found that
perception of an inferior employment status may result in the develop-
ment of resentment toward the positive image of the firm (Buonocore,
2010; Johnson & Ashforth, 2008). On the other hand, it has been
found that based on perceived characteristics of the organizations and
the nature of interaction with the organization, subcontracted workers
may develop an organizational identity for both the client and the
employing organization (Boswell et al., 2012; Broschak & Davis-Blake,
2006; Coyle-Shapiro, Morrow, & Kessler, 2006; George & Chattopad-
hyay, 2005).
We argue that, regarding the impersonal basis of identification, the
greater the prestige and distinctiveness of the client firm and overlap
of personal and organizational values, the stronger will be subcon-
tracted workers’ identification with the client firm (George & Chatto-
padhyay, 2005). We further argue that the terms and conditions of the
relationship between subcontracted workers and their client organiza-
tions will also have a substantial impact on the nature of the relation-
ship between the two parties (Coyle-Shapiro et al., 2006). Employment
arrangements that give the subcontracted workers the perception that
they are part of the client organization’s in-group are likely to help sub-
contracted workers to categorize themselves as bona fide members of
| 7
the client firm and may help them develop organizational identity vis-

a-vis their client organizations (Boswell et al., 2012).
Therefore, client firms that have distinctive socially responsible
reputations, value and support their subcontracted workers as mem-
bers of the organization, treat them fairly, and provide them higher lev-
els of incentives are more likely to be incorporated in the self-
definition of their subcontracted workers (Coyle-Shapiro et al., 2006;
George & Chattopadhyay, 2005). Additionally, an overlap of individual
values and organizational values—both created and sustained in a spe-
cific social and institutional milieu—may further enhance organizational
identity. Last, the length of the relationship between subcontracted
workers and their client firms may also be a major factor as longer
interaction may provide adequate time to build a meaningful relation-
ship (Collier & Esteban, 2007). A longer relationship prolonging subcon-
tracted workers’ exposure to the organizational values may further
stimulate the development of organizational identity (Dutton et al.,
1994).
Finally, how does organizational identity enhance social relations
between subcontracted and regular employees? SIT states that it “is
the extent to which people identify with a particular social group that
determines their inclination to behave regarding their group member-
ship” (Ellemers, Kortekaas, & Ouwerkerk, 1999, p. 372). We have
already discussed that organizational identification represents a stron-
ger form of social identification with a group and represents internaliza-
tion of organizational attributes, norms, and values. Hence,
internalization may lead to “de-personalization of the self (i.e., the indi-
vidual is seen to exemplify the group),” increasing the need to fit in by
conformity to group norms (Ashforth & Mael, 1989, p. 26). In essence,
we argue that organizational identity, resulting from internalization, will
lead to a strong link between the subcontract employees and their
respective client organizations and would lead to group cohesion and
positive social relations with the regular workers.
Based on these ideas, the following hypotheses are presented:
Hypothesis 4: The relationship between overall CSR perception of
the subcontracted workers and social relations with regular work-
ers will be mediated by their organizational identity.
Hypothesis 4A: The relationship between external CSR percep-
tion of the subcontracted workers and social relations with regular
workers will be mediated by their organizational identity.
Hypothesis 4B: The relationship between internal CSR perception
of the subcontracted workers and social relations with regular
workers will be mediated by their organizational identity.
The model is presented in Figure 1.
4 | METHODS
4.1 | Procedure and participants
All survey participants were subcontracted workers employed as driv-
ers for the broadcasting company’s news teams. The survey partici-
pants were chosen because their work arrangement represented a
8 |
FIGURE 1 A theoretical framework
triangular employment relationship where their workplace attitudes
may be influenced by employment policies of the client firm (Connelly
& Gallagher, 2004). Additionally, it was expected that a well-defined
relationship between the subcontracted workers and their client firms
might also create a relationship between organizational CSR and sub-
contracted workers’ workplace attitudes. Second, the subcontracted
drivers in our sample worked side by side with regular employees
(news reporters and technicians). This close contact in a team type
environment provided us with a context in which social relations
become important and can be tested. Finally, as already discussed, sub-
contracted workers gave us an opportunity to test our model in an
employment arrangement with extreme alienation.
Questionnaires were administered in Korean, and a double-blind
back translation process was adopted to avoid subjectivity in the trans-
lation of the questions (Brislin, 1970). As recommended by Voegtlin
(2011), first the original English questionnaire was translated into
Korean by the first translator, then the second translator translated the
Korean questionnaire to English. Finally, the two English questionnaires
were compared and in the case of discrepancies both translators recon-
ciled the translated versions to capture the meaning of the original sur-
vey. To reduce common method variance and social desirability bias,
we kept the individual responses anonymous and ensured that there
were no inherently right or wrong answers.
A total of 464 surveys were sent out to all subcontracted drivers
working as drivers for the news teams in the studied companies. A
total of 131 completed surveys were returned, representing a response
rate of 30.38%. All participants in this study are male with an average
age of 42.96 years. Jobs requiring driving are usually considered haz-
ardous occupations in Korea. Furthermore, driving a news team could
involve additional issues of odd timings and hazardous situations.
Therefore, it may be surmised that women drivers are a rarity in the
broadcasting industry. More than half, that is, 54.96% of all respond-
ents belonged to KBS. The tenure of the respondents ranged from 14
to 162 months (M 5 87.49, SD 5 32.38).
4.2 | Measures
4.2.1 | Perceived CSR
The measure for organizational CSR elicited employee perception
regarding organizational social responsibility rather than the employee
ALI AND JUNG
understanding of the objective CSR policies of the organization. The
survey focused on the broadcasting company, that is, the client, as
opposed to the subcontracting company, that is, the employer. We
took our cue from Hansen et al. (2011) and developed four items to
measure subcontracted workers’ perception of organizational CSR. The
participants gave answers to the following items: “I work for a socially
responsible client firm that serves the greater community,” “My client
firm invests time, money, and other resources for socially responsible
activities,” “My client firm considers diversity, as well as minority and
family, benefit program as an important policy,” and “My client firm has
a lot of concern for workplace and employee issues.” The responses
were scored on a five-point Likert-type rating scale with scores ranging
from strongly disagree (1) to strongly agree (5). Cronbach’s alpha for all
items for perceived CSR was .88.
4.2.2 | Psychological contract violation
The psychological contract violation scale consisted of a four-item
instrument that was developed by Robinson and Morrison (2000) and
had also been used by Hekman, Bigley, Steensma, and Hereford
(2009). All items focus on the felt psychological breach and violation
perceived by the subcontracted workers vis-a-vis their client firms. The
participants answered questions like: “I feel that my client firm has vio-
lated the contract between us” and “I feel extremely frustrated by how
I have been treated by my client organization.” Cronbach’s alpha for all
items was .93.
4.2.3 | Unfairness perception
The unfairness perception scale consisted of a five-item instrument
used by Janssen (2000, 2001). The subcontracted workers’ unfairness
perception reflected their assessment of their effort vis-a-vis the
rewards received. We asked questions like: “I work myself too hard con-
sidering my outcome,” “I put more energy into my job than it is worth.”
Finally, the items were averaged to create a single index for unfairness
perceptions. The resulting five-item scale had a reliability value of .85.
4.2.4 | Organizational identification
Organizational identification of the subcontracted workers with the cli-
ent organizations was measured by a five-item instrument used by
Mael and Ashforth (1992). One item from the original six-item instru-
ment was omitted from the factor analysis. The responses were scored
ALI AND JUNG | 9

T A B LE 1 Confirmatory factor analyses employees were merged (Four-factor model B). We also calculated the
three-factor model with perceived CSR and psychological contract vio-
x2 df SRMR RMSEA IFI TLI CFI
lation and unfairness perception as a single factor, and organizational
Five-factor 395.62 242 .07 .07 .92 .90 .92
identification and social relations with standard employees as the other
model
single factor. Our comparisons showed that the five-factor model was a
Four-factor 613.66 246 .08 .11 .81 .76 .80
model A significantly better fit than all other models (see Table 1).
Additionally, a factor analysis was conducted using the principal-
Four-factor 600.06 246 .08 .11 .81 .77 .81
model B components method. Varimax rotation was used for the factor analysis
(see Table 2). Results of the exploratory factor analysis with principal
Three-factor 816.00 249 .10 .13 .70 .63 .69
model component indicated five-factor with an eigenvalue of more than 1.
The factor loadings found in the rotated matrix ranged from .64 to .91.
on a five-point Likert-type scale with scores ranging from strongly dis- As with all self-reported data, there is the possibility of common
agree (1) to strongly agree (5). Examples of the items are: “I am very method variance. To remedy this problem, we conducted two tests
interested in what others think about the client broadcasting firm,” and that determined the extent of common method variation in the current
“When I talk about the client broadcasting firm, I usually say ‘we’ rather analysis. First, Harman’s (1976) one-factor test, as suggested by Pod-
than ‘they.’” Cronbach’s alpha for all items was .88. sakoff and Organ (1986), was conducted. A factor analysis using all
items led to the extraction of five distinct factors that accounted for
4.2.5 | Social relations with regular employees 69.12% of the total variance, with the first factor explaining 30.06% of
The social relations of the subcontracted workers with regular employ- the variation. This result suggests that the common method effects do
ees were measured with a six-item instrument used by Broschak and not seriously distort the results observed in this study. To further con-
Davis-Blake (2006). Social relations with coworkers reflected partici- firm this result, a single unmeasured latent method factor, used by Pod-
pants’ perception of how much regular employees and subcontracted sakoff, MacKenzie, Lee, and Podsakoff (2003), was also used. Results
workers help each other, are friendly with each other, and defend showed that while the common method factor did improve model fit, it
coworkers against others. For example, the measured items included: accounted for 18.78% of the total variance. This variance is far less
“subcontracted workers and standard employees in my department than the 25% recommended by Williams, Cote, and Buckley (1989).
often help each other on the job,” and “subcontracted workers and Hence, the results of these tests suggest that common method var-
standard employees in my department usually get along with each iance is not pervasive enough to distort the effect of the results.
other.” The responses were scored on a five-point Likert-type scale
with scores ranging from strongly disagree (1) to strongly agree (5).
4.4 | Analysis strategy
Cronbach’s alpha of all items was .86.
We have used hierarchical regression analysis and structural equation
modeling (SEM) to test our hypotheses. Recently, in mediation testing
4.3 | Model fit comparison and common method
SEM has been used as an alternative to hierarchical regression. This
variation tests
strategy has several advantages related to the investigation of latent var-
Before analyzing the various regressions to test our hypothesis, we iables with multiple indicators (James, Mulaik, & Brett, 2006), control of
conducted a confirmatory factor analysis using maximum likelihood measurement error (Cheung & Lau, 2008), and analysis of more compli-
estimation to assess the discriminant validity of the substantive con- cated paths including the multiple mediators (Wood, Maltby, Gillett, Lin-
structs measured in this study. In evaluating the model fit, we used the ley, & Joseph, 2008). Another methodology, namely bootstrapping, was
following fit indices: the chi-square goodness-of-fit statistic (v2), the also adapted for the mediation test. Bootstrapping remedies the normal
root-mean-square error of approximation (RMSEA), the standardized distribution through resampling from the original sample. Therefore, we
root-mean-square residual (SRMR), the incremental fit index (IFI), the first tested the hypotheses using SEM techniques and then confirmed
Tucker Lewis Index (TLI), and the comparative fit index (CFI) (Gosser- the indirect effect with bootstrapping analysis (Shrout & Bolger, 2002).
and & Diefendorff, 2005).
Additionally, we tested the mediation effects with hierarchical regression
First, we assessed the fit of a five-factor model for perceived CSR,
modeling to account for any possible difference in the internal values on
psychological contract violation, unfairness perceptions, organizational
CSR activity among the studied broadcasting firms due to their different
identification, and social relations with standard employees
ownership structures, that is, public and private. Hence, we controlled
(v2 5 395.62, degree of freedom 5 242, p 5 .00; SRMR 5 .07,
for ownership structure in the regression model.
RMSEA 5 .07, IFI 5 .92, TLI 5 .90, CFI 5 .92). This analysis demon-
strated an acceptable fit of the data (Carlson & Mulaik, 1993; Hox,
4.5 | Hypothesis testing
2010; Hu & Bentler, 1999). Next, we compared the fit of the five-factor
model to that of a four-factor model where psychological contract viola- Descriptive statistics and correlations between all of the variables are
tion and unfairness perception were combined (Four-factor model A) presented in Table 3. As expected, perceived CSR is positively associ-
and organizational identification and social relations with standard ated with organizational identification (r 5 .43, p < .01), and social
10 | ALI AND JUNG

T A B LE 2 Factor analysis results (Varimax rotation)

Subcontracted workers and standard employees in my department often help each other on .66
the job.

Subcontracted workers and standard employees in my department really stick together. .83

Subcontracted workers and standard employees in my department usually get along with .86
each other.

Standard employees in my department are quick to defend each other from criticism by .66
people from outside the department.

Subcontracted workers and standard employees in my department are friendly. .64

Standard employees in my department take a personal interest in me. .70

I am very interested in what others think about the client broadcasting firm. .78

When I talk about the client broadcasting firm, I usually say “we” rather than “they.” .86

The client broadcasting firm successes are my successes. .82

When someone praises the client broadcasting firm, it feels like a personal compliment. .80

If a story in the media criticized the client broadcasting firm, I would feel embarrassed. .71

I feel a great deal of anger toward my client company. .83

I feel betrayed by my client company. .91

I feel that my client firm has violated the contract between us. .83

I feel extremely frustrated by how I have been treated by my client organization. .87

I work myself too hard considering my outcome. .76

I give a great deal of time and attention to the organization, but get very little appreciation. .79

I invest more in my job than I receive in return. .79

The rewards I receive are not proportional to my investments. .76

I put more energy into my job than it is worth. .72

I work for a socially responsible client firm that serves the greater community. .69

My client firm invests time, money, and other resources for socially responsible activities. .75

My client firm considers diversity, as well as minority and family, benefit program as an .88
important policy.

My client firm has a lot of concern for workplace and employee issues. .76

Eigenvalue 7.21 4.20 2.36 1.67 1.31

% of variance 30.06 17.50 9.82 6.70 5.45

relations with standard employees (r 5 .40, p < .01). The correlation Hypothesis 1 predicted that CSR would negatively associate with
analysis also showed that perceived CSR has a negative relationship unfairness perceptions. The results in Model 5 of Table 4 show a nega-
with psychological contract violation (r 5 2.47, p < .01) and unfairness tive and significant relationship between perceived CSR and unfairness
perceptions (r 5 2.33, p < .05). perceptions (b 5 2.30, p < .01). Thus, Hypothesis 1 was supported.

T A B LE 3 Descriptive statistics and correlations among variables

Variable name Mean S.D 1 2 3 4

1. Perceived CSR 2.58 .91 1

2. Psychological contract violation 3.22 .89 2.47** 1

3. Unfairness perceptions 3.70 .61 2.33* .36** 1

4. Organizational identification 3.14 .91 .43** 2.09 201 1

5. Social relations with standard employees 3.05 .66 .40** .26** .03 .45**

N 5 131, *: p < .05, **: p < .01 (two-tailed).

ALI AND JUNG | 11

T A B LE 4 Results of effects of CSR on unfairness perceptions: The mediating role of psychological contract violation

1 2 3 4 5 6 7 8 9
Variables Psychological contract violation Unfairness perceptions

Age .11 .13 .13 .01 .01 .01 2.04 2.02 2.02

Education .13 .10 .10 .20** .18** .19** .16* .16* .17*

MBC .13 2.01 2.01 .13 .04 .06 .09 .05 .06

SBS 2.02 2.02 2.02 2.16* 2.16* 2.16* 2.15* 2.15* 2.16*

CSR 2.48*** 2.30*** 2.18*

External CSR 2.25*** 2.24** 2.18

Internal CSR 2.28*** 2.09 2.02

Psychological contract violation .33*** .25*** .25***

Adjusted R square .03 .24 .21 .06 .14 .14 .16 .18 .18

F 1.08 34.42 *** 17.08*** 3.06** 12.48*** 6.47*** 16.49** 10.30*** 7.04***

*p < .05, **p < .01, ***p < .001 (two-tailed), KBS is reference dummy variable, Education (1 5 High School, 2 5 College).

Also, we proposed that perceived CSR would positively relate to social
relationship with standard employees. The results in Model 5 of
Table 5 show that perceived CSR is positively linked to social
relationship with standard employees (b 5 .39, p < .01). This result sup-
ports Hypothesis 3.
Since CSR can be decomposed into external and internal CSR, we
also tested the effects of these two components of CSR on our varia-
bles. The results in Model 6 of Tables 4 and 5 show that external CSR
has significant relationships with both unfairness perceptions
(b 5 2.24, p < .05) and social relationship with standard employees
(b 5 .30, p < .01)—supporting Hypotheses 1A and 3A. On the other
hand, our results show that internal CSR has no direct influence on
subcontracted workers’ unfairness perception and social relationship
with standard employees—not supporting Hypotheses 1B and 3B.
These results suggest that social reputation and prestige of the client
firm are important factors determining subcontracted workers’ percep-
tion and attitude.
To test the mediation effects, we used SEM and verified the indi-
rect effect of perceived CSR on unfairness perception and social rela-
tions with coworkers. Figure 2 gives us the standardized path
coefficients. Perceived CSR is negatively related to psychological con-
tract violation (b 5 2.52, p < .01) and positively associated with organi-
zational identification (b 5 .40, p < .01). At the same time, psychological
contract violation is positively related to unfairness perceptions
(b 5 .28, p < .01) and organizational identification is positively related
to social relations with standard employees (b 5 .40, p < .01). These
results indicate mediating effects of psychological contract violation in
the relationship between perceived CSR and unfairness perceptions

T A B LE 5 Results of effects of CSR on Social relationship with standard employees: The mediating role of organizational identification

1 2 3 4 5 6 7 8 9
Variables Organizational identification Social relationship with standard employees

Age 2.01 2.02 2.02 2.13 2.15* 2.14* 2.13 2.14* 2.14*

Education .09 .12 .10 .08 .11 .10 .05 .07 .06

MBC 2.12 .01 2.01 2.22** 2.11 2.12 2.17** 2.11 2.12

SBS 2.04 2.04 2.03 2.03 2.03 2.03 2.02 2.02 2.02

CSR 2.44*** .39*** .25***

External CSR .34*** .30*** .20*

Internal CSR .13 .12 .07

Organizational identification .42*** .32*** .32***

Adjusted R square .01 .17 .21 .05 .19 .19 .23 .27 .26

F .83 27.36 *** 14.22*** 2.80** 22.04*** 11.44*** 29.17*** 19.51*** 13.08***

*p < .05, **p < .01, ***p < .001 (two-tailed), KBS is reference dummy variable, Education (1 5 High School, 2 5 College).
12 | ALI
FIGURE 2 The results for the structural equation model
and the mediation effects of organizational identification in the rela-
tionship between perceived CSR and social relationship with regular
employees.
To confirm the mediation effect, we conducted 5,000 bootstrap
samples to construct 95% bias-corrected confidence intervals around
the indirect effects. The results show that perceived CSR had a signifi-
cant indirect effect on unfairness perception through psychological
contract violation (b 5 2.08, CI95% 5 2.21 to 2.01), and on social rela-
tionship with standard employees via organizational identification
(b 5 .11, CI95% 5 .05 to .18). In both paths, the results confirm the indi-
rect effect because bootstrapped 95% confidence intervals do not
include zero. Furthermore, the results of SEM and bootstrapping pres-
ent equal to the results of the hierarchical regression in Tables 4 and 5.
Therefore, Hypotheses 2 and 4 are supported.
Finally, we tested the mediating effects of psychological contract
violation in the relationship between unfairness perceptions and the
decomposed CSR, that is, external and internal. As shown in Figure 3,
the relationship between external and internal CSR and psychological
contract violation was found to be significant (b 5 2.28, p < .01 and
b 5 2.26, p < .01, respectively). Furthermore, it was also found that
the relationship between psychological contract violation and unfair-
FIGURE 3 The results for the structural equation model
AND JUNG
ness perceptions was also significant (b 5 .28, p < .01), hence, support-
ing Hypotheses 2A and 2B. On the other hand, organizational
identification plays the mediating role only in the relationship between
external CSR and social relationship—supporting Hypothesis 4A but
not supporting Hypothesis 4B. These results are similar to the results
of the hierarchical regression in Tables 4 and 5.
5 | DISCUSSION
5.1 | Results
We have initiated a discussion on the impact of CSR on the workplace
attitudes of irregular workers. Our results show that overall CSR and
external CSR perceptions of the subcontracted workers have an
adverse impact on their unfairness perception vis-a-vis their client firms
and a positive effect on social relations with regular workers. Further-
more, overall CSR and external CSR perceptions have a negative rela-
tionship with psychological contract violation, which mediates the
relationship between CSR perception and unfairness perception, and a
positive relationship with organizational identification, which mediates
the relationship between perceived CSR and social relations with
ALI AND JUNG
regular employees. Surprisingly, in the case of internal CSR, except for
Hypothesis 2B, all other hypotheses were not supported. Here we can
only hazard the explanation that the subcontracted workers have a
complex three-way work arrangement. Therefore, the efforts of inter-
nal CSR from the client firm might not have been fully attributed by
the subcontracted workers to their client firms and might have been
attributed to the employing organization or the subcontracting work-
ers’ unions. Additionally, the fact that KBS, which represents the largest
portion of our sample, had hired its subcontracted workers from its
subsidiary might have affected the results as well.
It would be germane here to discuss the influence of the cultural
and institutional imperatives on our results. As we have not measured
the contextual impact, it would be difficult to give a definitive comment
on the actual extent of its effect on our results. However, we do
believe that the contingent institutional factors may have impacted our
results in two ways.
First, the conceptualization of moral principles in society affects
the understanding of CSR in that society (Kim & Choi, 2012). Under
the Confucian influence, the Korean society has evolved as a collectiv-
istic society featuring: loyalty to the collective, personal and organiza-
tional virtue, social stability based on hierarchical social structures,
social obligation, and long-term orientation. Individuals inculcated in
this culture expect their organizations to serve the collective, that is,
the society. It has been found that, as opposed to individualistic soci-
eties, Korean workers are more critical when it comes to assessing the
social responsibility of their organizations (Kim et al., 2013). Therefore,
it could be argued that if the subcontracted workers perceive that their
respective organizations are fulfilling their social responsibilities, they
may develop an overlap between individual and organizational values
and subsequently positive attitudes vis-a-vis their firms.
Second, in a collectivistic, hierarchical social structure, Korean
workers have accepted the paternalistic leadership of their employers
and have extended family loyalty to their respective organizations (Bae
& Rowley, 2001; Kim et al., 2013). Hence, Korean workers, in a harmo-
nious milieu, may find it natural to develop a relationship with their
firms based on trust and identity as opposed to employees from an
individualistic society.
5.2 | Contributions to the extant literature
Our study supports several scholarly contributions related to the work-
place attitudes of irregular workers. We confirm that subcontracted
workers can: develop a psychological contract with the client firm
(George & Chattopadhyay, 2005); integrate with regular workers under
certain work designs and conditions (Lautch, 2003); and develop social
identity with the client organization based on the perceived character-
istics of the organization (Coyle-Shapiro et al., 2006; George & Chatto-
padhyay, 2005), longer tenure, and prolonged exposure to the
organization’s culture (Dutton et al., 1994).
However, our study makes significant contributions to the extant
literature on CSR and its impact on employee attitudes, and more spe-
cifically on irregular workers. First, our study has ventured into an
unexplored area in the CSR literature, that is, the impact of CSR per-
| 13
ception on irregular employee workplace behaviors. The study, in fact,
underscores an important organizational conundrum in which attempts
at numerical flexibility should not preclude the need for firms to have
irregular workers with positive workplace attitudes and a cohesive
workforce. In a time of high flux, we have highlighted CSR as one tool
that may improve irregular employees’ workplace attitudes.
Second, we measure the impact of composite and disaggregated
CSR on our dependent variables. This contribution has provided us
with a deeper understanding of the proposed relationships and has
introduced the social dimension of CSR in our study. Third, we argue
that the impact of CSR on irregular employees is a complex phenom-
enon. Therefore, it needs to be explained through multiple theories of
human behavior. Hence, we have used two psychological mechanisms
that have already been utilized—SET and SIT—and introduced a new
theory—fairness heuristic theory—to explain the impact of external
CSR in our proposed model. We argue that the addition of fairness
heuristic theory has two theoretical contributions: one, it embodies the
ethics-based psychological mechanism that underscores the impact of
external CSR on employee attitudes; two, fairness heuristic theory may
act as an antecedent to SIT and SET. Third, our results suggest a media-
ting role of psychological contract and organizational identification in
the relationship between CSR perception and unfairness perception
and social relations with regular employees, respectively. These find-
ings improve our understanding of the relationship between CSR and
irregular employee attitudes. Finally, the contextual variables of our
study set the initial boundary limits of the discussion on the impact of
CSR on the workplace attitudes of irregular workers.
5.3 | Practical implications and limitations
The most important practical implication of our study is that organiza-
tions should maintain a positive reputation by instituting a clear and
distinctive policy toward their expected societal roles. This policy
should be clearly articulated and propagated to all organizational stake-
holders including irregular workers, and it should be made part of the
organizational strategy.
Two, it has been argued that a strategic integration of human
resource management (HRM) policies and CSR efforts can improve the
implementation of CSR policies (Jamali, El Dirani, & Harwood, 2015)
and may lead to synergetic outcomes (Graafland & Zhang, 2014; Jamali
et al., 2015). Therefore, managers and organizations should be particu-
lar about how their subcontracted workers are treated and perceived
within the workplace (Boswell et al., 2012). In a triangular employment
setting, supportive HRM practices for subcontracted workers should
be instituted. These practices may include emphasis on giving proper
feedback, recognition of good performance, opportunity to improve
skills, and effective dispute resolution mechanisms. Client firms can
also provide subcontracted workers access to certain amenities that
are enjoyed by the regular workers, for example, cafeteria, gymnasi-
ums, and daycare facilities, and create artifacts like uniforms or apparel
with company logo to create a visual link with subcontracted workers.
Three, our results may also be explained by an overlap between
organizational values and the personal values of the subcontracted
14 | ALI
workers. Therefore, one important human resources policy could be to
hire subcontracted workers carefully by putting greater emphasis on
person-organization fit. This overlap of values can be assessed through
short interviews conducted by the HR manager or the concerned man-
agers of the client firm or by surveys done by the employer that aim to
evaluate personality traits of the prospective subcontracted workers.
Despite several theoretical and practical contributions, this work is
not without its limitations. First, notwithstanding the significance of
the results, the findings are interpreted within the Korean culture and
institutional imperatives. Second, our sample only includes subcon-
tracted workers. Our results can contribute positively to the broad
understanding of the impact of CSR on different workforce arrange-
ments. However, the limited sample begs the question of whether our
findings could be applied to other types of contingent workers as well
as regular employees. To ensure that our theoretical framework can be
used to predict the behaviors of other types of irregular workers and
standard employee behaviors, future research should attempt to have
a more inclusive sample representing different types of contingent
workers. Even within the category of subcontracted workers, future
research may explore subcontracted workers with shorter contracts.
Third, the findings of this study may also be complemented by more
focused case studies (Eisenhardt, 1989).
Finally, despite rigorous testing, the data used in this study are not
completely free from various methodological concerns. First of all, the
research is designed in a cross-sectional setting which cannot avoid the
issue of causality. Also, there is the potential for common method var-
iance, as the data were collected using a self-reported survey. Although
we conducted the one-factor test (Harman, 1976) and latent unmeas-
ured common variance (Podsakoff et al., 2003) to confirm common
method bias, we cannot completely exclude the possibility of common
method bias. Therefore, future research should be designed to over-
come the current methodological limitations.
NOTES
1
The type of stakeholders also disaggregates CSR into internal and external
CSR, where internal include employees of all kinds and external include all
stakeholders outside of the boundaries of the firm.
2
Opinion of a CEO of a temporary employment agency taken from Feld-
man et al. (1994).
3
Workers who are associated with two organizations: primary employer
and the client firm.
4
South Korean culture compared to western countries is quite different on
the dimensions of individualism/collectivism, long-term orientation, and
uncertainty avoidance (South Korea’s scores: 18 individualism, 100 long-
term orientation, and 85 uncertainty avoidance; USA’s score: 91 individu-
alism; 26 long-term orientation, and 46 uncertainty avoidance) (retrieved
from https://geert-hofstede.com/south-korea.html on January 22, 2017).
5
See Note 4.
6
See Note 4.
7
All companies, including the government broadcasting companies, have
control over their business policies and enjoy administrative independ-
ence (Kazuma, 2005).
8
The two government owned channels earn more than 50% of their reve-
nues from advertising. However, if they are unable to earn substantial
AND JUNG
revenue from advertising, that is, a minimum of 30% of their total reve-
nues, then politically motivated self-interested parties might try to control
their content by using subscription fees as their weapon (Kazuma, 2005).
9
Newspaper article published on April 9, 2013 taken from http://mediaus.
co.kr.
10
This information was collected through an interview with a union leader.
11
The average organizational tenure is 87.5 months with scores ranging
from 71.1 to 100.9 months in all studied companies.
12
For detailed discussion, see Rousseau (1998) and Buonocore (2010).
13
Self-concept is composed of personal identity (idiosyncratic characteris-
tics like psychological and physical attributes, and abilities and interests),
and social identity (salient group classification) (Ashforth & Mael, 1989).
14
Dutton et al. (1994) have given a similar argument with regard to all indi-
viduals in their relationship with their workplaces.
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AUTHOR BIOGRAPHIES
MOHAMMAD A. ALI is an Assistant Professor at the School of Business
Administration, Pennsylvania State University. He received his PhD
from the School of Management and Labor Relations, Rutgers Univer-
sity. Dr. Ali’s published work has appeared in Journal of Business Ethics,
| 17
Journal of Workplace Democracy, Relations Industrielles/Industrial Rela-
tions, Advances in Industrial and Labor Relations, Journal of Occupational
Rehabilitation, and Monthly Labor Review. Dr. Ali can be contacted at:
maa31@psu.edu or maali1969@gmail.com.
HEUNGJUN JUNG is an Associate Research Fellow at Korea Labor Insti-
tute, in the Republic of Korea. He received his PhD from Korea Univer-
sity and worked as a research professor in Korea University Business
School. Dr. Jung’s previous published research has appeared in, Journal
of Business Ethics, Management Decision, Relations Industrielles/Industrial
Relations, and Advances in the Economic Analysis of Participatory &
Labor-Managed Firms. Dr. Heungjun Jung can be contacted at: hjun-
jung@kli.re.ke or hjun.jeong@gamil.com.
How to cite this article: Ali MA, and Jung H-J. CSR and the
workplace attitudes of irregular employees: The case of subcon-
tracted workers in Korea. Business Ethics: A Eur Rev. 2017;00:1–
17. doi:10.1111/beer.12146.